Spasht.
All topics
DevelopingEconomyDebated

India-US trade deal and tariffs

Talks on a first India-US trade deal, the extra 10% US duty on Indian goods, and a US law that threatened 100% tariffs over Russian oil.

AI illustration
The question

Can India close a US trade deal that gives its exporters an edge without giving up its freedom to buy oil where it chooses?

10%extra US duty on about 55% of India's exports to the US since 24 July 2026PIB
$50.81 billionIndia's goods exports to the US in April-September 2026, up 11.1% on a year earlierCNBC-TV18
Up to 100%tariff the US Graham Act allows on top Russian-energy buyers; waived on 16 October 2026S&P Global · CBS News
1.6 million barrels/dayIndia's Russian crude imports in August 2026, the most of any country, per S&P GlobalS&P Global
Context

How we got here

A tariff is a tax a country charges on goods it imports. On 13 February 2025, Prime Minister Narendra Modi and US President Donald Trump launched talks on a Bilateral Trade Agreement (BTA). In August 2025 US tariffs on many Indian goods reached 50%, including a 25% penalty linked to India's purchases of Russian oil. In early February 2026 the two sides announced a framework for an interim deal: the penalty was removed and the planned rate on most Indian goods fell to 18%. On 20 February 2026 the US Supreme Court ruled that the emergency law Trump had used does not allow tariffs, which upended that plan. Since 24 July 2026, about 55% of India's exports to the US pay an extra 10% duty under a US 'Section 301' trade action on forced-labour rules, on top of normal duties; the other 45%, including generic medicines and smartphones, are exempt, India's commerce ministry says. A second Section 301 probe into 'excess capacity', which names India, is still open. India says it will sign only when its exporters get a tariff edge over rivals such as Bangladesh, Vietnam and Indonesia.

What it means for India

Garment, carpet, footwear and shrimp exporters pay the full extra 10% US duty, while generic medicines and smartphones are exempt. Indian textiles also got no quota exemption of the kind given to Bangladesh. A 100% tariff under the Graham Act would have been added on top of existing duties on Indian goods; it is waived for now but the US can revive it. A deal that gives Indian goods lower tariffs than Bangladesh, Vietnam or Indonesia would help labour-heavy exporters win US orders.

In their own words

Where each side stands

Government of India

Commerce Minister Piyush Goyal says the first tranche of the deal is finalised and in legal drafting, and will be put into effect once India gets a 'comparable advantage or competitive advantage' over peer countries. On the Russian-oil law, the Ministry of External Affairs said India remains committed to energy security for 1.4 billion people through diversified sourcing and will take all necessary measures to protect its trade interests.

The Hindu · ThePrint
Congress and opposition

Congress leaders called the US Russian-oil law an 'affront to Indian sovereignty' and asked whether India's energy policy would be 'controlled from Washington'. Randeep Surjewala accused the government of 'abject capitulation'. Jairam Ramesh asked whether Modi raised US action over Russian oil and Iran in his 30 September call with Trump.

The Hindu · The New Indian Express
US administration

US Trade Representative Jamieson Greer said on 1 October the two sides were near the end of talks but a deal was not 'imminent'. US Ambassador Sergio Gor said on 15 October that 'the big items are done' and the aim of the Russian-oil law is to end the war, not to punish anyone. Trump waived the law's tariffs on 16 October, citing the US national interest.

CNBC · Forbes India · CBS News
Exporters and analysts

An India Today analysis found the 10% duty's exemptions favour chemicals and engineering goods, while cotton, garments, carpets, footwear and shrimp, which employ many workers, pay the full rate. A parliamentary committee on commerce urged an early deal with safeguards and relief schemes for textile and seafood exporters.

India Today · Moneycontrol
7 moments

The timeline

  1. Trump waives 100% Russian-oil tariffs on India and others, two days before the deadline

    The order also waives a 500% duty on Russian goods and some sanctions on Russia.

  2. Goyal says first part of US trade deal is finalised, but India wants a tariff edge before it starts

    Goyal: the first tranche is finalised and in legal drafting; no text has been released.

  3. US trade chief Greer says India deal is near the end but 'not imminent'

    Greer: 'I don't think there's something imminent', though talks are near the end.

  4. Modi and Trump speak by phone as Goyal holds trade talks in the US

    Modi called the 30 September conversation with Trump 'productive'; Trump shared no details.

  5. Trump signs Russian-oil tariff law, starting a 30-day clock; Congress urges Centre not to 'surrender'

    Trump signed the Graham Act on 18 September 2026.

  6. US Congress passes bill allowing up to 100% tariffs on Russian oil buyers; India warns of fallout

    The House passed the Graham Act 262-159; the Senate had approved it 86-11 on 7 August 2026.

  7. India's exports to the US rise 21.83% in August despite the extra 10% duty

    Exports to the US were $8.32 billion in August 2026, up 21.83% from a year earlier (provisional data).

Honest gaps

What we still don't know

  • ?When the first tranche will be signed, and what tariff rate it will set for Indian goods.
  • ?Whether the open Section 301 'excess capacity' probe will add duties on Indian textiles, steel or solar modules.
  • ?How long the Graham Act waiver will last, and whether US pressure over Russian oil returns.
Who reported this

Sources

Left-leaning · 1Centre · 11Right-leaning · 1Official record · 1International · 1

15 outlets across the spectrum. Leanings are a rough guide to who reported it, not a verdict on accuracy.

  1. The White HouseUnited States-India Joint Statement
  2. ReutersIndia delays U.S. trade talks after Supreme Court rejects Trump tariffs, source says
  3. PIBFinal US Section 301 Measures on Forced Labour: India Placed in Lower Tariff Tier at 10%
  4. India TodayIndia's US tariff barely moved. The real blow is in the fine print
  5. CNBC-TV18India's exports to US rise 11% to $50.8 billion in April-September
  6. S&P GlobalCongress passes sanctions, tariff bill targeting buyers of Russian energy
Show all 16 sources
  1. The HinduIndia-U.S. deal 'finalised', implementation after clarity on India's competitive advantage, says Goyal
  2. ThePrintIndia 'firmly committed' to ensuring energy security: MEA reacts to US' Russia Sanctions Bill
  3. The HinduTrump's tariff decision can hurt energy security, trade, economy of India: Congress
  4. CNBCU.S. trade representative Greer says deal with India not 'imminent' after Modi-Trump call
  5. Forbes IndiaBig items done, confident we will have India-US trade deal: Sergio Gor
  6. CBS NewsTrump waives tariffs on largest buyers of Russian oil, days before Lindsey Graham-backed law was set to take effect
  7. MoneycontrolParliament panel proposes export resilience schemes to shield India's key sectors from US tariff shocks
  8. Federal RegisterInitiation of Section 301 Investigations: Acts, Policies, and Practices of Certain Economies Relating to Structural Excess Capacity and Production in Manufacturing Sectors
  9. The New Indian ExpressCongress questions Modi's 'good friend, Donaldbhai' call with Trump, flags key India-US concerns
  10. FirstpostIndia-US trade deal: First phase finalised, legal drafting underway
India-US trade deal and tariffs | Spasht